USA > History > 2010 > F.B.I. (I)

In Ordinary Lives,

U.S. Sees the Work

of Russian Agents

June 28, 2010
The New York Times
By SCOTT SHANE
and CHARLIE SAVAGE

WASHINGTON — They had lived for more than a decade in American cities and suburbs from Seattle to New York, where they seemed to be ordinary couples working ordinary jobs, chatting to the neighbors about schools and apologizing for noisy teenagers.

But on Monday, federal prosecutors accused 11 people of being part of a Russian espionage ring, living under false names and deep cover in a patient scheme to penetrate what one coded message called American “policy making circles.”

An F.B.I. investigation that began at least seven years ago culminated with the arrest on Sunday of 10 people in Yonkers, Boston and northern Virginia. The documents detailed what the authorities called the “Illegals Program,” an ambitious, long-term effort by the S.V.R., the successor to the Soviet K.G.B., to plant Russian spies in the United States to gather information and recruit more agents.

The alleged agents were directed to gather information on nuclear weapons, American policy toward Iran, C.I.A. leadership, Congressional politics and many other topics, prosecutors say. The Russian spies made contact with a former high-ranking American national security official and a nuclear weapons researcher, among others. But the charges did not include espionage, and it was unclear what secrets the suspected spy ring — which included five couples — actually managed to collect.

After years of F.B.I. surveillance, investigators decided to make the arrests last weekend, just after an upbeat visit to President Obama by the Russian president, Dmitri A. Medvedev, said one administration official. Mr. Obama was not happy about the timing, but investigators feared some of their targets might flee, the official said.

Criminal complaints filed in Federal District Court in Manhattan on Monday read like an old-fashioned cold war thriller: Spies swapping identical orange bags as they brushed past one another in a train station stairway. An identity borrowed from a dead Canadian, forged passports, messages sent by shortwave burst transmission or in invisible ink. A money cache buried for years in a field in upstate New York.

But the network of so-called illegals — spies operating under false names outside of diplomatic cover — also used cyber-age technology, according to the charges. They embedded coded texts in ordinary-looking images posted on the Internet, and they communicated by having two agents with laptops containing special software pass casually as messages flashed between them.

Neighbors in Montclair, N.J., of the couple who called themselves Richard and Cynthia Murphy were flabbergasted when a team of F.B.I. agents turned up Sunday night and led the couple away in handcuffs. One person who lives nearby called them “suburbia personified,” saying that they had asked people for advice about the local schools. Others worried about the Murphys’ elementary-age daughters.

Jessie Gugig, 15, said she could not believe the charges, especially against Mrs. Murphy. “They couldn’t have been spies,” she said jokingly. “Look what she did with the hydrangeas.”

Experts on Russian intelligence expressed astonishment at the scale, longevity and dedication of the program. They noted that Vladimir V. Putin, the Russian prime minister and former president and spy chief, had worked to restore the prestige and funding of Russian espionage after the collapse of the Soviet Union and the dark image of the K.G.B.

“The magnitude, and the fact that so many illegals were involved, was a shock to me,” said Oleg D. Kalugin, a former K.G.B. general who was a Soviet spy in the United States in the 1960s and 1970s under “legal” cover as a diplomat and Radio Moscow correspondent. “It’s a return to the old days, but even in the worst years of the cold war, I think there were no more than 10 illegals in the U.S., probably fewer.”

Mr. Kalugin, now an American citizen living outside Washington, said he was impressed with the F.B.I.’s penetration of the spy ring. The criminal complaints are packed with vivid details gathered in years of covert surveillance — including monitoring phones and e-mail, placing secret microphones in the alleged Russian agents’ homes, and numerous surreptitious searches.

The authorities also tracked one set of agents based in Yonkers on trips to an unidentified South American country, where they were videotaped receiving bags of cash and passing messages written in invisible ink to Russian handlers in a public park, according to the charges.

Prosecutors said the “Illegals Program” extended to other countries around the world. Using fraudulent documents, the charges said, the spies would “assume identities as citizens or legal residents of the countries to which they are deployed, including the United States.

Illegals will sometimes pursue degrees at target-country universities, obtain employment, and join relevant professional associations” to deepen false identities.

One message from bosses in Moscow, in awkward English, gave the most revealing account of the agents’ assignment. “You were sent to USA for long-term service trip,” it said. “Your education, bank accounts, car, house etc. — all these serve one goal: fulfill your main mission, i.e. to search and develop ties in policymaking circles and send intels [intelligence reports] to C[enter].”

It was not clear what the intelligence reports were about, though one agent was described as meeting an American government employee working in a nuclear program. The defendants were charged with conspiracy, not to commit espionage, but to fail to register as agents of a foreign government, which carries a maximum sentence of 5 years in prison; 9 were also charged with conspiracy to commit money laundering, which carries a maximum penalty of 20 years. They are not accused of obtaining classified materials.

There were also hints that Russian spy bosses feared their agents, ordered to go native in prosperous America, might be losing track of their official purpose. Agents in Boston submitted an expense report with such vague items as “trip to meeting” for $1,125 and “education,” $3,600.

In Montclair, when the Murphys wanted to buy a house under their names, “Moscow Center,” or “C.,” the S.V.R. headquarters, objected.

“We are under an impression that C. views our ownership of the house as a deviation from the original purpose of our mission here,” the New Jersey couple wrote in a coded message. “From our perspective purchase of the house was solely a natural progression of our prolonged stay here. It was a convenient way to solving the housing issue, plus ‘to do as the Romans do’ in a society that values home ownership.”

Much of the ring’s activity — and the F.B.I. investigators’ surveillance — took place in and around New York. The alleged agents were spotted in a bookstore in Lower Manhattan, a bench near the entrance to Central Park and a restaurant in Sunnyside, Queens.

Secret exchanges were made at busy locations like the Long Island Rail Road’s station in Forest Hills, where F.B.I. watchers in 2004 spotted one defendant who is not in custody, Christopher R. Metsos, the charging papers say.

The arrests made a splash in neighborhoods around the country, as F.B.I. teams spent all Sunday night hunting through houses and cars, shining flashlights and carting away evidence.

In Cambridge, Mass., the couple known as Donald Heathfield and Tracey Foley, who appeared to be in their 40s and had two teenage sons, lived in an apartment building on a residential street where some Harvard professors and students live.

“She was very courteous; she was very nice,” Montse Monne-Corbero, who lives next door, said of Ms. Foley. The sons shoveled snow for her in the winter, Ms. Monne-Corbero said, but they also had “very loud” parties.

Lila Hexner, who lives in the building next door, said Ms. Foley told her she was in the real estate business. “She said they were from Canada,” Ms. Hexner said.

Another of those charged, Mikhail Semenko, was a stylish man in his late 20s who drove a Mercedes S-500, said Tatyana Day, who lives across the street from him in Arlington, Va. He had a brunette girlfriend and the young couple spoke to one another in Russian and “kept to themselves,” Ms. Day said.


Reporting was contributed by Benjamin Weiser, Nate Schweber, Kenneth Chang, Andy Newman and Colin Moynihan from New York; Mark Mazzetti and Yeganeh June Torbati from Washington; and Abby Goodnough from Boston.

In Ordinary Lives, U.S. Sees the Work of Russian Agents, NT, 28.6.2010, http://www.nytimes.com/2010/06/29/world/europe/29spy.html

Allan Kornblum,

Counsel to F.B.I., Is Dead at 71

February 21, 2010
The New York Times
By WILLIAM GRIMES

Allan Kornblum, who helped steer the F.B.I. into the post-J. Edgar Hoover era by drafting guidelines for its surveillance operations in the 1970s, and whose testimony helped convict the murderer of a black man in a celebrated civil rights case revived nearly 40 years after the event, died Feb. 12 in Gainesville, Fla. He was 71.

The cause was cancer of the esophagus, his son Aaron said.

Mr. Kornblum, a former New York City police officer and F.B.I. agent, was recruited by the Justice Department under President Gerald R. Ford to write new procedures that would provide the Federal Bureau of Investigation, for the first time, with a clear set of rules to govern its domestic surveillance and counterintelligence work that respected the Fourth Amendment rights of private citizens and would, in theory, prevent the kind of abuses that had tarnished the agency’s image in recent years.

He went on to write key provisions in the 1978 Foreign Intelligence Surveillance Act, or FISA, specifically the procedures for minimization — the separation of potentially valuable intelligence data from private data of no concern to the government. FISA governs the surveillance and collection of intelligence from foreigners or agents of foreign powers suspected of espionage or the planning of terrorist acts.

As deputy counsel for the Office of Intelligence Policy and Review, Mr. Kornblum supervised wiretap applications from the F.B.I. and the National Security Agency for surveillance operations focused on, among others, the spies John A. Walker Jr. and Aldrich H. Ames.

In 2003, Mr. Kornblum’s past as an F.B.I. agent cast him in a new role: the government’s chief witness in the murder trial of Ernest Avants. In 1966, Mr. Avants and two fellow Ku Klux Klansman had abducted and killed Ben Chester White, a black farmhand, in the hope that the heinousness of the crime would lure the Rev. Dr. Martin Luther King Jr. to Natchez, Miss., where he could be assassinated.

Mr. Avants was tried and acquitted in a state court. But when federal prosecutors decades later discovered that the killing had taken place in a national forest, they brought federal murder charges against him.

By this time, both of Mr. Avants’s accomplices had died, but Mr. Kornblum, a young agent working in Mississippi at the time, had heard him confess to the crime when interviewing him about another case, the bombing of a civil rights worker’s car. He returned to Mississippi to testify.

After a three-day trial that began in late February 2003, a jury of nine whites and three blacks deliberated for three hours and returned a guilty verdict. Mr. Avants was sentenced to life without parole and died in prison in 2004.

Allan Nathaniel Kornblum was born in Brooklyn on March 4, 1938. He grew up in Park Slope and attended Stuyvesant High School, where he was a star quarterback.

After earning a degree in police administration from Michigan State University in 1958 and a law degree from New York University in 1961, he joined the New York City Police Department as a patrolman, and later worked as a criminal investigator for the Treasury Department.

He served for two years in the Army with a military police battalion in Korea before joining the F.B.I., where he worked on civil rights cases in Mississippi, and served with the bank robbery squad in New York.

In 1969, after earning a master’s degree in police administration at the John Jay College of Criminal Justice in Manhattan, he became the director of security at Princeton University, where he earned a doctorate in 1973 with a dissertation on ethics and corruption in the New York Police Department.

At Princeton, he distinguished himself during the mayhem later known as the Snow Riot of 1970. When a horde of students, inspired by the first snowfall of the season, went on a semi-nude rampage punctuated by Christmas caroling, he herded them into the gym, where college officials had prepared hot chocolate and doughnuts.

In addition to his son Aaron, of Mercer Island, Wash., he is survived by his wife, the former Helen Ettinger; another son, Jesse, of Silver Spring, Md.; and three grandchildren.

In 2000, Mr. Kornblum left the Justice Department and became the first legal adviser to the secret court established by FISA to oversee requests for surveillance warrants. Three years later, he was appointed a federal magistrate judge for the Northern District of Florida.

At the Avants trial, Mr. Kornblum testified that Mr. Avants had told him, “I blew his head off with a shotgun,” and then had bragged that he could not be convicted of murder because Claude Fuller, one of his accomplices, had already shot Mr. White more than 15 times.

The lawyer for the Justice Department asked Mr. Kornblum: “It’s been 37 years. How do you remember?”

“It’s one of those singular events in a person’s life,” Mr. Kornblum answered. “It’s burned in my memory.”

    Allan Kornblum, Counsel to F.B.I., Is Dead at 71, NYT, 21.2.2010, http://www.nytimes.com/2010/02/21/us/21kornblum.html

F.B.I., Laying Out Evidence, Closes Anthrax Case

February 20, 2010
The New York Times
By SCOTT SHANE

WASHINGTON — More than eight years after anthrax-laced letters killed five people and terrorized the country, the F.B.I. on Friday closed its investigation, adding eerie new details to its case that the 2001 attacks were carried out by Bruce E. Ivins, an Army biodefense expert who killed himself in 2008.

A 92-page report, which concludes what by many measures is the largest investigation in F.B.I. history, laid out the evidence against Dr. Ivins, including his equivocal answers when asked by a friend in a recorded conversation about whether he was the anthrax mailer.

“If I found out I was involved in some way...” Dr. Ivins said, not finishing the sentence. “I do not have any recollection of ever doing anything like that,” he said, adding, “I can tell you, I am not a killer at heart.” But in a 2008 e-mail message to a former colleague, one of many that reflected distress, Dr. Ivins wrote, “I can hurt, kill, and terrorize.” He added: “Go down low, low, low as you can go, then dig forever, and you’ll find me, my psyche.”

The report disclosed for the first time the F.B.I.’s theory that Dr. Ivins embedded in the notes mailed with the anthrax a complex coded message, based on DNA biochemistry, alluding to two female former colleagues with whom he was obsessed.

The report described how an F.B.I. surveillance agent watched in 2007 as Dr. Ivins threw out a article and a book, Douglas Hofstadter’s “Godel, Escher, Bach: An Eternal Golden Braid,” that could betray his interest in codes, coming out of his house in Frederick, Md., at 1 a.m. in long underwear to make certain the garbage truck had taken his trash.

Whether the voluminous documentation will convince skeptics about Dr. Ivins’s guilt was uncertain on Friday. Representative Rush D. Holt, a New Jersey Democrat and a physicist who has sharply criticized the bureau’s work, said the case should not have been closed.

“Arbitrarily closing the case on a Friday afternoon should not mean the end of this investigation,” Mr. Holt said, noting that the National Academy of Sciences was still studying the F.B.I.’s scientific work. He said the F.B.I. report laid out “barely a circumstantial case” that “would not, I think, stand up in court.”

Dropped into a mailbox in downtown Princeton, N.J., the anthrax letters were addressed to news organizations and two United States senators and contained notes with radical Islamist rhetoric that appeared to link them to the Sept. 11 attacks, which occurred a week before the first of the two mailings.

In the jittery wake of 9/11, they set off a nationwide panic over random discoveries of white powder that people feared might be more anthrax. The real anthrax — a few teaspoons of very fine powder — infected at least 22 people, including several postal workers, and killed 5.

Congressional offices and the Supreme Court were evacuated as a result of anthrax contamination, and the Postal Service spent hundreds of millions of dollars to clean up mail-processing centers. The federal government increased spending on biodefense, with a total of nearly $60 billion since 2001, and rejuvenated the faltering military anthrax vaccine program on which Dr. Ivins had worked for many years.

The investigation included more than 10,000 interviews on six continents, the report said, and F.B.I. investigators conducted preliminary investigations of 1,024 people and “in-depth investigations” of more than 400 people, examining those with possible financial motives, links to the drug and pesticide industries or a history of corresponding with the lawmakers targeted by the mailings.

In response to requests under the Freedom of Information Act, the bureau also posted on the Web more than 2,700 pages of interview notes and investigative documents to bolster its case.

Dr. Ivins, a microbiologist who had worked with anthrax for decades as part of the vaccine program at the Army’s biodefense laboratory at Fort Detrick, Md., took a fatal overdose of Tylenol in July 2008 at the age of 62, after months of intense scrutiny by the F.B.I., which had placed a GPS device on his car, examined his trash and questioned his wife and two children.

They discovered his penchant for taking long drives at night, sometimes mailing letters and packages from distant spots under assumed names. They discovered his obsession with a sorority, Kappa Kappa Gamma, and with images of blindfolded women, hundreds of which were found on his computer, the report says.

Days after his suicide, Justice Department and F.B.I. officials said they believed that Dr. Ivins had carried out the anthrax attacks alone and they released search warrant affidavits that included some of the evidence against him.

The affidavits included e-mail messages in which he confessed to paranoia and delusion; time records showing he had worked alone in the laboratory late at night before the anthrax mailings in September and October 2001; and genetic analysis tracing the mailed anthrax powder to a flask overseen by Dr. Ivins and stored in his lab.

But some of Dr. Ivins’s colleagues at the United States Army Medical Research Institute of Infectious Diseases in Frederick, including several supervisors who knew him well, publicly rejected the F.B.I.’s conclusion. They said he was eccentric but incapable of such a diabolical act, and they questioned whether he could have produced the deadly powder with the equipment in his lab.

Skeptics also pointed to F.B.I. investigators’ long focus on another suspect, Dr. Steven J. Hatfill, another former Army scientist whom the F.B.I. pursued in 2002 and 2003, keeping him under constant surveillance. In 2008, the government exonerated Dr. Hatfill and agreed to a settlement worth $4.6 million to resolve a lawsuit alleging that his privacy rights had been violated.

Long before he became a serious suspect, Dr. Ivins, one of the government’s most experienced anthrax researchers, was a valued consultant to the F.B.I. investigators on the letters case. Only after path-breaking genetic analysis led to his lab did investigators consider that their genial scientific adviser might actually be their quarry.

As they focused on Dr. Ivins and read his e-mail messages, the report said, they began to be increasingly convinced that he was the mailer. And as he became aware that he was under scrutiny, he directed the F.B.I. repeatedly to other potential suspects. Once, in 2007, he wrote what the F.B.I. calls “an illogical 12-point memo” suggesting that the two female former colleagues with whom he was obsessed might have mailed the letters.

When one of the women, made aware of the memo, confronted Dr. Ivins about it in 2008, he wrote to her, blaming an alternate personality he called “ ‘Crazy Bruce,’ who surfaces periodically as paranoid, severely depressed and ridden with incredible anxiety.” He complained that “it seems as though I have been selected as the blood sacrifice for this whole thing.”

    F.B.I., Laying Out Evidence, Closes Anthrax Case, NYT, 20.2.2010, http://www.nytimes.com/2010/02/20/us/20anthrax.html

F.B.I. Charges Arms Sellers With Foreign Bribes

January 21, 2010
The New York Times
By DIANA B. HENRIQUES

Sometimes the proposition was delivered in a quiet corner of the Mandarin Oriental Hotel in Miami. Sometimes the setting was the elegant Ritz-Carlton Hotel, a few blocks from the White House.

The topic might be grenade launchers, rifles, handguns, ammunition or bulletproof vests — components of the basic Warlord Starter Kit.

But the question put to a succession of arms industry executives last May was always the same: Would you pay bribes to get a piece of a $15 million contract to equip the presidential guard of an African country?

According to the Justice Department, almost two dozen executives said yes, put it in writing and wrote checks — without realizing that the African officials getting the bribes were actually undercover F.B.I. agents.

The play-acting ended on Tuesday, when 22 top-level executives, including a senior sales executive at Smith & Wesson, were arrested in what Justice Department officials called the first undercover sting ever aimed at violations of the federal ban on corporate bribes paid to get foreign business.

Even in its relatively quiet disclosure of the cases on Tuesday, the Justice Department was careful to withhold any details that might identify or endanger the undercover team, saying that the investigation was continuing.

The case is the biggest prosecution of individuals for foreign corporate bribery ever pursued by the Justice Department. The 16 indictments in the case are also the early fruits of a new initiative for the Justice Department, Lanny A. Breuer, assistant attorney general for the criminal division, said in an interview on Wednesday.

“This is the first time we’ve used the technique of an undercover operation in a case involving foreign corporate bribery,” Mr. Breuer said. “The message is that we are going to bring all the innovations of our organized crime and drug war cases to the fight against white-collar criminals.”

All of the defendants work at, or run, small companies that supply the staples of military and law enforcement life everywhere — small arms, uniforms, bullets — and that jockey for deals at a level well below military industry giants like Lockheed or Boeing.

The arrests seemed orchestrated to deliver the Justice Department’s message directly to others in the business. All but one of the defendants were arrested on Tuesday in Las Vegas, where they were attending the Shooting, Hunting, Outdoor Trade Show and Conference, known as the SHOT Show, which is billed as “the world’s premier exposition of combined firearms, ammunition, archery, cutlery, outdoor apparel, optics, camping and related products and services.”

The drama began to unfold last spring in the sleek beachfront glamour of the Mandarin Oriental Hotel in Miami. There, on May 13, the curtain went up on a two-city sting worthy of a George Clooney caper.

After a closely guarded investigation that had taken more than two years, the cast was in place.

There was a mystery figure identified in the indictments as “Individual 1,” a former executive in the law enforcement and military equipment industry who clearly lent credibility to the business deal offered to the defendants, all described as business associates of his.

There was “Undercover Agent 1,” an F.B.I. agent posing as a representative of the defense minister of an unidentified African nation, Country A. And there was “Undercover Agent 2,” another agent posing as a procurement officer who reported directly to the defense minister.

Over two days in Miami, a number of executives sat down in separate meetings with the undercover team to discuss a sales opportunity. A week later, the undercover team moved to the Ritz-Carlton Hotel in Washington, where more executives sat down to talk.

The script varied only in the products on the shopping list.

In each case, the former sales executive said that a friend of his, a self-employed sales agent, was “tasked by Country A’s minister of defense with obtaining various defense articles for outfitting Country A’s presidential guard.”

The two people with the shopping list were actually the undercover agents. The goods would be shipped, not to Africa, but to a warehouse in Virginia. The “bribes” would be paid into a government bank account.

According to the Justice Department, all the defendants agreed to pay a 20 percent “commission” to the sales agent, even after being clearly told that half would go into the defense minister’s pocket, and they sent e-mail messages that confirmed their decisions.

In each case, the indictments said, the defendants completed a small “test” deal to reassure the fictional defense minister that he would personally get half of the 20 percent commission — as a bribe.

According to one indictment, a Florida executive later showed the deal to his company’s outside law firm and sent the undercover team an e-mail message rejecting the corrupt proposal. The same day, he called and negotiated a way to do the deal anyway, the indictment said.

Another of the defendants is Amaro Goncalves, who is vice president for sales at Smith & Wesson in Springfield, Mass. The company confirmed on Wednesday that Mr. Goncalves was an employee and said it was “prepared to cooperate fully” with the investigation. Mr. Goncalves, free on bail, could not be reached for comment.

The individuals are being prosecuted under the Foreign Corrupt Practices Act. That law, which dates to 1977, prohibits American citizens and companies — and, since 1998, foreign citizens and companies acting in the United States — from bribing foreign government officials to get or keep business.

For many years, some Foreign Corrupt Practices Act experts say, the United States waged a lonely battle against such transactions. But Mr. Breuer of the Justice Department said on Wednesday that “international cooperation is growing every day and getting better and better.” He particularly cited the help of British law enforcement agents, who served related search warrants in London on Tuesday.

The work of the F.B.I. was the core of the case. Besides the undercover team, more than 150 agents were involved in serving arrest and search warrants on Tuesday, according to Kevin Perkins, the assistant director of the bureau’s Criminal Investigative Division.

The investigation was led by an F.B.I. squad in Washington that specializes in foreign bribery investigations. New investigations are under way in other parts of the country, as well — one law enforcement source said that prosecutors in Brooklyn now have nearly a half-dozen in the works, compared with none three years ago.

The latest defendants, none of whom have yet been formally arraigned, are all accused of conspiring to violate the act; conspiring to engage in money laundering; and violating the act. The maximum term for the conspiracy and act violations is five years, while the money laundering conspiracy charge carries a prison term of 20 years.

The defendants are scheduled to make their first appearances in United States District Court in Washington on Feb. 3, a Justice Department spokeswoman said. However, the department said in its announcement that all were presumed innocent unless they had confessed or had been convicted.

Mr. Breuer said the real success of the sting would come in the months and years ahead. “From now on,” he said, “would-be F.C.P.A. violators should stop and ponder whether the person they are trying to bribe might really be a federal agent.”

Jenny Anderson contributed reporting.

    F.B.I. Charges Arms Sellers With Foreign Bribes, NYT, 21.1.2010, http://www.nytimes.com/2010/01/21/business/21sting.html